Rent Officers (Housing Benefit and Universal Credit Functions) (Modification) Order 2026

Baroness Pinnock Excerpts

Tuesday 3rd March 2026 Grand Committee

I genuinely believe that the sensible course is clear: stop the freeze permanently and relink local housing allowances to real rents so that the system works as was intended and homelessness is prevented rather than paid for. I think there is a moral case but I also believe there is a fiscal one. I beg to move.

[Baroness Pinnock (LD)]

My Lords, my noble friend Lady Thornhill set out the case for the Government to rethink their decision to freeze local housing allowance. She set it out superbly, with all the consequences that will occur as a result of a further year’s freeze on local housing allowance. I want to paint a picture of what that means to families in the small town in Yorkshire where I live and where I am an elected councillor.

You would not say that where I live is the richest of places on the planet; all the information indicates that some parts of my town are in the bottom 10% of the deprivation scores and most of the town is between 30% and 40% in the deprivation scores. That is the general picture of the town. It is a Victorian town with lots of Victorian terraces, two-up, two-downs, some back-to-backs—if anybody in London knows what that means—and the sort of places that open straight on to the street.

I looked this afternoon at a private-rented two-bed property—that means a two-up, two-down—and it is £750 per calendar month, or £173.05 per week. What is the local housing allowance for that part of Kirklees Council? It is £120.82. What that means is that families are having to find £50 a week extra. If they qualify for LHA, they are already not well off, and they are having to find £50 a week for that property. That is the cheapest I could find. I found another one, also a terrace, slightly larger but still a two-bed, and the rent is £825 a month, or £190 a week, so there will be a much bigger difference.

I understand where the Government are coming from, because the housing benefit bill has zoomed upwards. What my noble friend and I are arguing is that it needs a total rethink. I know that the Minister would not want what I have just described to be the case, and that equally, the country cannot keep spending billions of pounds on housing benefit. Some of us round this table in the Grand Committee know that this is one of the consequences of right to buy. If you live in a council property or a housing association property, the difference will not be as high, and most council house rents match local housing allowance. That is the background problem. How we solve it, I do not know, but the Government need to put their mind to it.

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[Baroness Pinnock (LD)]

I am sorry to interrupt the Minister, but I feel very strongly about the use of the phrase “affordable housing”. Affordable housing is, by definition, not affordable. The broad definition of affordability for rent is 80% of the market rent, which, for most people, is not affordable—but social housing at social rents is. I would love the Government to erase “affordable” and just talk about 300,000 homes for social rent. That would make a difference; I hope the Minister will agree.

[Baroness Sherlock (Lab)]

The 300,000 target is for both social and affordable housing. I would be very happy to share the noble Baroness’s views with my colleagues at MHCLG to make sure that they reflect on them, if that is okay with her, as that policy is probably above my pay grade.

On the question asked by the noble Viscount, Lord Younger, the real challenge is that, if we do not get a whole-system approach on this, we are never going to unblock the barriers to building and addressing the productivity issues in the housebuilding sector. We are, therefore, working really closely with industry—including developers, housing associations and local authorities—to try to get a step change in this area. We have already taken some significant steps to address the planning issues that were holding back the supply of housing. Within months of coming into government, we published our revised National Planning Policy Framework, and, in December, we launched a consultation on further reforms to the framework to unlock additional housing supply.

The noble Viscount also asked about what will happen to vulnerable people. Let me explain what is happening there. At the moment, there is something called the household support fund, and, separately, there are discretionary housing payments. Both of these are short-term funds; the DWP gives the money to local authorities to pay them out. The household support fund was only ever done for six months at a time, and it was never clear that it would be done again for the following six months. DHPs, however, were set for a year at a time. There were, therefore, two separate, short-term discretionary schemes with different purposes and different sets of rules. Just to complicate things, they also often went to different tiers of local government.

Instead, we are creating the crisis and resilience fund, which is a single, multi-year, streamlined fund. It will eventually replace both the household support fund and DHPs in England from 1 April 2026. The key is that people can plan for crisis and resilience support longer down the line. To ensure that there is a transition from where we are now to where we are going, discretionary housing payments will be replaced by the housing payment strand of the crisis and resilience fund, which will, for the first two years, simply mimic what discretionary housing payments do now; it will carry on in the same way. In Wales, DHPs will continue to be maintained and delivered, while Scotland has developed its own alternative for that—as this is a devolved issue—which it launched in 2024. So our intention is that that is what will happen.

The £1 billion includes the element for the housing strand but we are working closely with local authorities so that, by the time we get to year 3, we can look at how that can be done. Also, they will be able to top this up if they want. I recognise, in the context of all the challenges they have faced, that some local authorities do this at the moment because they want to put more into housing.

I hope that that is helpful. I would be very happy to answer any other questions.